Payday Critics Guilty Of 'Social Snobbery', Says Industry Chief

Ed Miliband, the newly-elected leader of Britain's opposition Labour Party, smiles as he listens to a speaker during the party's annual conference, in Manchester, England, Sunday Sept. 26, 2010. Labour elected young lawmaker Ed Miliband as its new leader Saturday after he narrowly defeated his older and better-known brother David Miliband in a contest to replace former prime minister Gordon Brown. (AP Photo/Lefteris Pitarakis)

Hamblin-Boone poured scorn on Miliband's proposal, which would slap payday lenders either with a 1% on their balance sheet or a 10% profits tax, saying: "It plays to the gallery, it's a good press release, but are we going to see some detail on how he is going to work it out?"

Referring to critics of the industry, he added: "I often say that 4% of the population have used payday loans but 96% have a strong opinion about them. It goes back to this social snobbery over payday loans, as politicians, media and consumer groups say 'we must do something about it'. Let's go back to the consumer and find out what they want done about it!"

"Comparing payday lenders with credit unions is a bit like comparing a supermarket with a food bank," Hamblin-Boone insisted.

Despite the industry's notoriety, the Consumer Finance Association boss said that customers who use the lenders have "incredibly high levels of satisfaction that would be the envy of lots of other financial services."

"Lenders focus on what customers want, they want simplicity, transparency and speed and to sort things there and then. That's where the banks lost people's sympathy as the whole market has to be consumer driven."

The CFA chief warned that opponents who "demonised" and "beat up" lenders risked "stigmatising" borrowers, adding: "Why would you lend to somebody who you dont think is going to pay you back? You might as well put a bucket out in the street and say help yourself and just hope they return it!"

Hamblin-Boone admitted he had once needed a short-term loan, explaining: "I had a shortfall when I moved jobs and there was a mess up in the accounts department, so like everybody else - you've got bills to pay!"